New Delhi should comply with the G7 price cap or refrain from using Western shipping and insurance services.
Washington has given its blessing to India to continue buying all the Russian oil it wants, even at prices that exceed those set by the cap mechanism imposed by the G7, but only if it refrains from using maritime, financial and insurance services. Westerners to fulfill transactions. .
crude in Russian “It will be sold at bargain prices, and we’re happy India gets that bargain or Africa or China.” US Treasury Secretary Janet Yellen told Reuters in New Delhi, where she met with Indian Finance Minister Nirmala Sitharaman on Friday.
Yellen argued that once the European Union stops all maritime imports of Russian oil next month, Moscow will be forced to accept the price cap or significant discounts from market rates.
“Russia will find it very difficult to continue shipping as much oil as it has when the EU stops buying Russian oil,” Yellen said. “They are going to be heavily looking for buyers, and a lot of buyers are relying on Western services.” The sanctions will limit the availability of those services to buyers who meet the maximum price.
The mechanism will give India and other countries operating outside the cap more leverage in driving down the prices they pay for oil, Yellen explained. The aim is to keep Russian oil on the market while Moscow is punished for its military offensive in Ukraine and its energy income is drastically reduced.
Russian officials have said the country will not sell oil or other raw materials at capped prices. Last month, a US Treasury official estimated that up to 90% of Russian oil would continue to flow to buyers outside the cap mechanism.
India, the world’s third-biggest oil importer, has increased purchases of Russian crude this year, and in October Moscow overtook Saudi Arabia and Iraq to become New Delhi’s biggest oil supplier, according to energy cargo tracker Vortex.
New Delhi seeks stable energy ties with Moscow and will continue to buy Russian oil for the benefit of India, its Foreign Minister Subrahmanyam Jaishankar said in a meeting with his Russian counterpart Sergey Lavrov on Tuesday.
“It is our fundamental obligation to ensure that the Indian consumer has the best possible access on the most advantageous terms to international services. [energy] markets,” Jaishankar dijo.